Thousands of British families own a holiday home in France through an English family trust. The arrangement feels natural from London: the family home in Cornwall or the Dordogne cottage sits in a discretionary trust set up years ago, the trustees are old friends or a trust company, and everyone assumes the French house is owned like any other trust asset. France sees things very differently. French civil law has no domestic trust, French tax law treats your English trust as a foreign transparency problem to be declared, monitored and taxed, and the death of the person who put the house into the trust can trigger French death duties at rates that surprise British beneficiaries. Since Brexit, a British trust is the trust of a third country, and neither the trustees nor the family can rely on European administrative goodwill to smooth things over. This guide explains, in plain English, what the trustee must declare each year, what tax is due while the settlor is alive and after death, how the forced heirship rules of France interact with an English will, and how to challenge a French trust tax bill step by step.
I. How France taxes an English trust that holds a French house
A. Must your trustee declare the trust to the French tax office every year?
The first thing to understand is that France taxes what it can see, and it forces your trust into the open. There is no French equivalent of the English trust, so in 2011 Parliament created a tax definition that catches almost every foreign arrangement. Article 792-0 bis of the General Tax Code provides: “on entend par trust l’ensemble des relations juridiques créées dans le droit d’un Etat autre que la France par une personne qui a la qualité de constituant, par acte entre vifs ou à cause de mort, en vue d’y placer des biens ou droits, sous le contrôle d’un administrateur, dans l’intérêt d’un ou de plusieurs bénéficiaires ou pour la réalisation d’un objectif déterminé.” In ordinary English: any legal arrangement created under the law of a country other than France, by a person called the settlor (the constituant), placing property under the control of a trustee (the administrateur) for beneficiaries, counts as a trust for French tax purposes. Your English discretionary family trust, your interest-in-possession trust and your bare trust for the grandchildren all fall inside this definition, whether the trust deed was signed in London, Jersey or Guernsey.
Once the arrangement qualifies, the reporting duty falls on the trustee, even if the trustee lives in London and has never set foot in France. Article 1649 AB of the General Tax Code states: “L’administrateur d’un trust défini à l’article 792-0 bis dont le constituant ou l’un au moins des bénéficiaires a son domicile fiscal en France ou qui comprend un bien ou un droit qui y est situé […] sont tenus de déclarer les informations suivantes”. A French holiday home is a right situated in France, so a trust holding a cottage in the Lot must be declared even where the settlor and every beneficiary remain resident in the United Kingdom. The declaration covers the creation, amendment or termination of the trust and its terms, the identity of the effective beneficiaries, meaning every individual who is trustee, settlor or beneficiary and where relevant the protector or anyone exercising effective control, and the market value on 1 January of the year of the property held in the trust. For a family whose only French connection is the house, that means the trustee reports the house and its 1 January market value each year. The information is kept in a register under the responsibility of the minister for the budget, and the French tax administration publishes detailed guidance on these returns, including an English-language page on filing declarations relating to trusts and its published doctrine BOI-DJC-TRUST. A London trustee who assumes that English compliance is enough is therefore already in breach on the French side.
Declaration is only the first layer, because an undeclared or even a declared trust can attract an annual bill known as the prélèvement, a special yearly levy on trusts. Article 990 J of the General Tax Code provides: “Les personnes physiques constituants ou bénéficiaires d’un trust défini à l’article 792-0 bis sont soumises à un prélèvement fixé au tarif le plus élevé mentionné au 1 de l’article 977.” The levy is charged at the top rate stated in that article, on the net market value on 1 January of the relevant assets comprised in the trust. For settlors or beneficiaries who are not resident in France for tax purposes, only the assets situated in France count, which in practice means the French house and any capitalised income attached to it. The trustee must declare the composition and value of those assets and pay the levy to the competent public accountant by 15 June each year, and if the trustee defaults, the settlor and the beneficiaries are jointly liable for payment. There are two useful shelters worth checking before accepting any bill. The levy does not apply to irrevocable trusts whose exclusive beneficiaries are charities or pension schemes of the kind described in the article, and it is not due on assets that have already been included in a wealth-tax base and properly declared, either for the real-estate wealth tax known as the impôt sur la fortune immobilière or, below the taxable threshold, through the 1649 AB declaration itself. Many British families with a modest French cottage and a properly filed declaration can therefore argue the levy away entirely, but only if the paperwork proves it. The practical lesson is organisational: appoint one person to diary the 1 January valuation and the 15 June deadline, keep the trust deed, valuations and proof of every declaration filed, and treat the French calendar as seriously as the British one. On the British side of the picture, the family should also remember that a United Kingdom resident settlor or beneficiary of an offshore trust remains within the British rules on non-resident trusts described in the official GOV.UK guidance on non-resident trusts, so both countries may look at the same trust in the same year, each through its own lens.
B. What death duties apply when the settlor dies?
When the settlor dies, France imposes its transfer duties on gifts and deaths, called droits de mutation à titre gratuit, on the trust assets, and the French house cannot escape simply because the legal owner on paper is a London trustee. The mechanism is set by paragraph II of article 792-0 bis: “La transmission par donation ou succession de biens ou droits placés dans un trust ainsi que des produits qui y sont capitalisés est, pour la valeur vénale nette des biens, droits ou produits concernés à la date de la transmission, soumise aux droits de mutation à titre gratuit en fonction du lien de parenté existant entre le constituant et le bénéficiaire.” In plain terms, the net market value of the house at the date of transfer is taxed by reference to the family relationship between the settlor and the beneficiary who receives it, exactly as if the house had passed directly. A transfer from parent to child therefore uses the direct-line scale, while a transfer to a stranger uses the heaviest scale. The scales themselves sit in article 777, which fixes the well-known progressive tables, providing for example in the direct line: “Les droits de mutation à titre gratuit sont fixés aux taux indiqués dans les tableaux ci-après, pour la part nette revenant à chaque ayant droit”. And the standard tax-exempt allowance, called the abattement, between parent and child appears in article 779: “il est effectué un abattement de 100 000 € sur la part de chacun des ascendants et sur la part de chacun des enfants vivants ou représentés par suite de prédécès ou de renonciation.” Each living child can therefore receive 100,000 euros exempt from duty from each parent before the progressive rates bite, a point British families often underestimate when the Dordogne house alone is worth half a million.
Territorial scope is deliberately wide, and Brexit changed nothing here. Article 750 ter of the General Tax Code expressly lists among taxable property “les fonds publics, parts d’intérêts, biens ou droits composant un trust défini à l’article 792-0 bis et produits qui y sont capitalisés”, both where the deceased was resident in France for tax purposes and, crucially, as French-situated assets where the deceased was not resident. A settlor who lived his whole life in Surrey and never paid a euro of French income tax still leaves a French taxable estate composed of the Provençal farmhouse held in his trust. Tax residence itself turns on article 4 B, which treats as resident those who have in France their home or principal place of sojourn: “Sont considérées comme ayant leur domicile fiscal en France au sens de l’article 4 A : a. Les personnes qui ont en France leur foyer ou le lieu de leur séjour principal”. British readers who split retirement between Kent and the Charente should therefore check residence first, because residence widens the French claim from the French house to worldwide trust assets.
Timing holds a trap that has already produced litigation. In a ruling of 18 November 2020 the Commercial Chamber of the Cour de cassation, appeal number 18-14.242, explained: “le fait générateur des droits de mutation à titre gratuit est constitué par le transfert de propriété, qui, s’agissant de biens placés dans un trust, s’opère par l’effet de la distribution de l’actif du trust au bénéficiaire final, au jour de sa clôture, laquelle peut être postérieure au décès du constituant.” The chargeable event is the transfer of ownership, which for trust assets happens through distribution of the trust fund to the final beneficiary when the trust closes, and that closure can come after the settlor’s death. Read the full decision on the official site of the Cour de cassation. The consequence is practical and expensive: duties may be calculated by reference to values and beneficiaries identified years after the funeral, and a family that distributes the house informally without closing the trust properly can face a dispute about when tax became due and on what value. Procedurally, the estate must be declared through a notaire, the French public officer who settles successions, within the deadlines of article 641: “Les délais pour l’enregistrement des déclarations que les héritiers, donataires ou légataires ont à souscrire des biens à eux échus ou transmis par décès sont : De six mois, à compter du jour du décès, lorsque celui dont on recueille la succession est décédé en France métropolitaine; D’une année, dans tous les autres cas.” A settlor who dies in England gives the family one year, which passes quickly when a London trustee, a French notaire and valuers in two countries must agree on the papers. The official service-public.fr page on succession duties and declarations summarises these duties for the public and is a useful checklist alongside the statute.
One further French rule regularly ambushes English wills: the reserved share for children, called the réserve héréditaire. Article 913 of the Civil Code provides: “Les libéralités, soit par actes entre vifs, soit par testament, ne pourront excéder la moitié des biens du disposant, s’il ne laisse à son décès qu’un enfant ; le tiers, s’il laisse deux enfants ; le quart, s’il en laisse trois ou un plus grand nombre.” English law gives the testator almost total freedom, but where the deceased or at least one child is, at death, a national of a European Union Member State or habitually resident there, and the foreign law governing the succession offers children no reserved-share protection, each child may take a compensatory levy on the assets situated in France at death so as to recover the French reserved rights. Since Brexit, a purely British family living in Britain cannot use that mechanism against an English-law succession, but a British child settled in France, or a child holding Irish or French nationality, often can, and the French house is exactly the asset the levy attaches to. Choosing English law to govern the succession, a choice the EU Succession Regulation No 650/2012 allows a person to make in favour of the law of their nationality, does not remove the house from French transfer duties and does not neutralise the compensatory levy where its conditions are met. Families should therefore coordinate three documents before it is too late: an English will with an express choice of English law, a French will dealing with the French house consistently with that choice, and a letter of wishes asking the trustees to distribute in a way that respects the mathematics of the French reserved shares.
II. How can you challenge a French trust tax bill after Brexit?
A. Can the France-United Kingdom double tax treaty block the annual levy?
When the tax office sends a proposal of rectification, the French for a proposed reassessment, against the trustee for several years of the annual levy, the first reflex should be to test the legal nature of the levy against the applicable double tax treaty. A very recent decision shows why this analysis matters and how courts must conduct it. On 11 February 2026 the Commercial Chamber of the Cour de cassation, appeal number 23-14.305, ruled on the trustee of a Canadian trust called Oscar II, whose settlor, a French resident, had set the trust up in 1986 with financial assets. During a documentary audit the administration assessed the trustee to the 990 J levy for 2012 to 2015 at the top rate, arguing the assets should have been declared for wealth tax. The Paris Court of Appeal upheld the assessment, and the trustee appealed to the supreme court. The Cour de cassation examined the case through the France-Canada treaty on income and capital, citing its scope clause: “La présente Convention s’applique aux impôts sur le revenu et sur la fortune perçus pour le compte de chacun des Etats contractants, quel que soit le système de perception.” It then quashed the Paris judgment in full and sent the case back for retrial, requiring the lower court to measure the levy against the treaty’s provisions on taxes on capital. Read the full ruling on the official site of the Cour de cassation. The decision does not say that every treaty defeats the levy; it says that a court cannot uphold the levy without seriously examining whether the levy falls within the taxes the treaty covers and how the treaty’s distributive rules apply to it.
For a British family trust holding a French house, the same method applies with the treaty between France and the United Kingdom, and the examination must be concrete rather than assumed. The questions to put to the file are: does the levy, as applied to these facts, correspond to a tax on capital covered by the treaty, has the house already borne a covered tax such as the real-estate wealth tax with proper declaration so that the statutory shelter in article 990 J applies, and was the trustee given the reasoning needed to understand which treaty provisions the administration says preserve the charge? Where the house was properly declared year after year and included in a wealth-tax base, the treaty argument joins a domestic one, because the statute itself withdraws the levy from assets duly declared. Where nothing was ever declared, the treaty route is steeper, and the family should focus on proving the valuation, the kinship link and the applicable scale rather than promising itself a treaty miracle. One common misunderstanding should be cleared up: the February 2026 ruling concerned a Canadian trust and the France-Canada treaty, so no one can copy its outcome mechanically into a British case. Its value for British trustees is methodological. It obliges the administration and the judge to reason treaty by treaty, tax by tax, and that obligation is now part of the toolkit of anyone challenging a 990 J assessment on an English trust after Brexit. Domicile evidence matters at every stage of that argument, so gather proof of where each settlor and beneficiary actually lives, because the line in article 4 B between a French foyer and a mere holiday presence decides both the scope of the levy and the weight of the treaty.
B. Within what time limits and by what steps do you contest the assessment?
French tax disputes follow a compulsory staircase, and missing a step is fatal. Everything begins with the paper the tax office sends. The proposal of rectification sets out the years reassessed, the legal basis, usually articles 792-0 bis, 990 J or 750 ter, and the invitation to respond within thirty days. That response is the most cost-effective moment of the whole dispute: it is where the trustee corrects a wrong market value with a surveyor’s report, proves with receipts that declarations were filed, demonstrates that the house was included in a wealth-tax return, or explains with the trust deed and family records why the kinship rate applied is wrong. A calm, documented reply supported by valuations, deeds, prior returns and a clear calculation often reduces the bill before any formal claim exists, whereas silence or a one-line protest hardens the file. If the administration maintains the charge, it issues a recovery notice, and the dispute moves to the formal claim, called the réclamation contentieuse. Article L190 of the Tax Procedures Book defines its field: “Les réclamations relatives aux impôts, contributions, droits, taxes, redevances, soultes et pénalités de toute nature, établis ou recouvrés par les agents de l’administration, relèvent de la juridiction contentieuse lorsqu’elles tendent à obtenir soit la réparation d’erreurs commises dans l’assiette ou le calcul des impositions, soit le bénéfice d’un droit résultant d’une disposition législative ou réglementaire.” The claim goes to the tax office that issued the assessment, sets out each error of base or calculation and each statutory right relied upon, from the wealth-tax shelter to the treaty analysis, and attaches every exhibit in copy. Families should treat the two-year framework described in that same article as a backstop and file as early as possible, because interest accrues while the file sleeps.
If the administration rejects the claim expressly or by silence, the next step is the administrative court, called the tribunal administratif, of the place of the tax office. Article R421-1 of the Administrative Justice Code sets the golden rule: “La juridiction ne peut être saisie que par voie de recours formé contre une décision, et ce, dans les deux mois à partir de la notification ou de la publication de la décision attaquée.” Two months from notification of the rejection, no more, and the application must attack the decision itself rather than reopening the whole file in the abstract. Before that hearing, the bundle should contain the trust deed with a certified French translation, the 1649 AB declarations and acknowledgements of receipt, the 1 January valuations with the surveyor’s method explained, the wealth-tax returns where the shelter is invoked, the death certificate and notaire’s papers where succession duties are disputed, and a short treaty note mapping each French charge to the corresponding treaty provision following the method of the February 2026 ruling. Where succession duties on the house are at stake, coordinate with the notaire settling the estate so that the civil position on ownership, the trust closure date within the meaning of the November 2020 ruling, and the tax position tell the same story, because a notaire who records one date of transfer while the tax pleadings argue another hands the administration its best exhibit. Throughout, keep paying attention to parallel British obligations through the GOV.UK trust guidance, so that a victory in France does not create an undeclared distribution problem in Britain. Handled this way, most files narrow to one genuine point of law, valuation or treaty, which is exactly the shape a judge can decide in the family’s favour.
Conclusion
An English family trust does not make a French house disappear from the French tax map. The trustee must declare the trust and the house, value it every 1 January and meet the 15 June deadline, the annual levy can apply at the top statutory rate unless a shelter is proved, and the settlor’s death triggers French transfer duties on the house by reference to kinship, with the chargeable event potentially fixed at distribution after death. The reserved-share rules can then give a European-connected child a compensatory claim on that same house despite an English will. None of this means every bill is correct. The February 2026 quashing of a 990 J assessment shows that courts must test the levy against the applicable tax treaty, the November 2020 ruling fixes the chargeable event by the reality of distribution rather than by administrative convenience, and the thirty-day reply, the formal claim and the two-month court deadline give every family a structured path to challenge errors. Keep the deed translated, the valuations reasoned, the declarations receipted and the deadlines diaried, and have the file reviewed before the next 1 January valuation falls due.